Learning in the Learning Organization
Joachim Hasebrook
(educational financial portal [efiport] AG, Germany
jh@efiport.de)
Abstract: Humans are not able to cope with the exponential growth
of information and the increasing speed of information and business processes
fostered by information and communication technologies. Technical support
not only for information storage and retrieval but also for information
selection, process planning, and decision support is needed. Most of the
ICT investments, however, do not foster innovation or productivity. Recent
studies show that ICT-based training is the main instrument of knowledge
management. On-line media and self-directed learning environments are among
the most effective training solutions in terms of cost, time and logistics.
In the last few years, the percentage of employees participating in training
courses increased. At the same time, there has been a decline of training
budgets. E-Learning is able to deliver more valuable training for less
money only if it is part of an integrated knowledge and skills management
system. Two case studies of knowledge and meta data management systems
are discussed.
Keywords: multimedia information systems, office automation,
social and behavioral science
Categories: H.4.1, H.5.1, J.4
1 Knowledge, Technology, Strategy
For several years, high investments in information and communication
technology (ICT) were considered to guarantee increased productivity. For
the last ten years, however, surveys have not been able to show a significant
increase in productivity by further computerization, [Bubic/Quenter/Rupplet
2000]. The authors point out, that the banks invested "defensively":
they reacted to technically induced changes by completely or partly automating
processes, but neither redefined value-chains nor positioned themselves
in new market segments. In fact, 70% of all ICT-investments are used to
safeguard service and delivery, 20% to increase performance, and only 10%
to improve the competitiveness of the enterprise. Thus, modern ICT is more
like a narrowing dead-end than like a useful support for a dynamically
growing and changing business.
The banking sector is leading the development and adoption of electronically
supported workplace training and is now moving towards distance education
and integrated multimedia learning environments to accommodate the scale
of vocational training and communication requirements. Today, many distance
learning projects are realized by means of conventional media, such as
printed matter and telephone hotlines. There is an emerging consensus that
banks must invest in and provide access to a complete range of training
programs for their employees from basic skills to
high-end management and technical skills training. Electronic performance
support systems (in the form of on-line media and self-directed learning
environments) are among the most effective training solution in terms of
cost, time and logistics.
Therefore, some German banks have already reduced their face-to-face
training courses by approximately 30% p.a. and all major banks are now
introducing Web-based training (WBT) as a means for cost effective training.
During the same period of time, German banks experienced a considerable
increase of training costs: Major German banks and bank associations spent
between 88% and 136% more money on training in 1996 than in 1989. A closer
look at these data reveals there was a dramatic increase of training costs
between 1989 and 1993. Since 1994, there has been a decline of training
budgets at the same rate as in other business sectors.
Banks are spending 6% of their personnel budgets for training but 15-30%
of their administrative and operational budgets for information and communication
technology (ICT). For instance, the largest of German banks, Deutsche Bank,
spent 340 million German Mark (US-$ 205 million) on training and 2.3 billion
German Mark (US-$ 1.3 billion) on ICT. This translates into approximately
4,200 German Mark (US-$ 2,500) for training and 6,700 German Mark (US-$
4,000) for ICT per employee [Hasebrook 1999].
American universities which use Web-Based Training (WBT) or "electronic
learning" (in short: e-learning) learned that total costs of ownership
(TOC) are higher for e-learning than for on-site classroom teaching. The
main reasons are added technical and tutorial services as well as considerable
up-front ICT investments [Bernath/Rubin 1998] Will
there be no gains in productivity because of investments in ICT and e-learning?
Naturally, ICT itself does not create values. Values are created by its
goal-oriented application in enterprises. The strategic areas of application
of ICT can be sketched as in figure 1:

Figure 1: Strategic Areas of Application of Information Technology
according to [Bubik/Quenter/Ruppel 2000, p. 105].
Therefore, "knowledge management" is a new definition of internal
business and service processes with direct effects on rating and control
mechanisms in enterprises and indirect influences on the new definition
of business and market segments. In fact, knowledge management is conceived
as an internal service which helps to collect, distribute, use, and evaluate
explicit knowledge which can be represented in ICT structures [Probst,
Raub, and Romhardt 1998, and Kopp 1999]. Business
segments with a very high demand of knowledge like banking or consulting
industries are leading users of knowledge management; chemical, pharmaceutical
and mechanical engineering enterprises are in backlog. One example is shown
in figure 2.

Figure 2: Status of Knowledge Management in Different Business
Segments [source: IT Research Report, March 2000]
Of course it is no proof of more efficient or innovative business processes
when a company - according to its self-assessment - claims to use more
or less knowledge management. The so-called new economy marks the shift
from the information to the knowledge economy, and asks for a different
approach towards efficient business processes: It is symptomatic for the
new economy that the business cycles are temporarily overcome, a development
which has bestowed an unequalled growth on the USA during the last years
without nameable inflation, and has lead to a more dynamic performance
of the stock market and of net products [Löchel
2000].
The market for information- and knowledge-based -mostly digitized- goods
is only beginning to grow as yet, and training and education will be very
important in this context. According to Merrill Lynch analysts, ICT-based
training processes (or better: knowledge acquisition processes) are degrading
what is presently meant to be the "new economy" to the "old
ICT-based economy", because as before it is the industrial production
of digital goods that is of prime importance, and not the control and support
of knowledge-intensive business processes (cf. figure 3).
"old economy" |
"new economy" |
Termination in 4 years (university etc.) |
Termination in 40 years ( lifelong learning) |
Training seen as cost center |
Training seen as competitive advantage |
Mobility of learners |
Mobility of contents |
Distance learning in self-study |
Distributed, co-operative learning |
E-mail, letter and printed products |
Multimedia service centers with online media |
Generalized offers for everybody |
Tailor-made, individual offers |
Regional vendors |
(mostly international) trade names and well-known individuals |
Training just in case |
Training just in time |
Self-study, personal responsibility |
Learning partnerships, organizational learning |
Figure 3: Learning in the Knowledge Society (source: Merrill
Lynch. The Book of Knowledge, 1999]
2 Web-Based Learning: E-Learning
In order to employ multimedia in an efficient way, it is at least as
important to prepare the learning environment adequately as it is to choose
the proper media mix and the instruction methods. Figure 4 summarizes the
research data and meta analyses on learning efficiency and duration of
learning.

Figure 4: Learning Efficiency and Duration of Learning; Learning
Rate and Study Time for Textbooks (text only) are set to 100 [cf. Hasebrook
1995].
The optimal selection of the media mix and the methods of instruction,
and - at least as important as that - the adequate preparation of the learning
surroundings are basic requirements for efficient learning with multimedia.
Figure 4 gives a first view on learning efficiency and duration of learning
of the research data and meta analyses [Hasebrook 1995].
On the left, the average study time (time) and learning rate (learning)
of a textbook (text only) equals "100" and serves as a benchmark
for other types of media. The values in this figure are only approximate
values for the usage of the media in question, because above all the learning
success depends on the carefully controlled and adequate use of media,
and only little on the medium of learning. However, the frequently cited
"pyramid of retention rates", which simply summarizes media effects,
is unreasonable. This fact can easily be illustrated by an example: Nobody
is able to learn foreign-language vocabulary effectively when the radio
is playing the latest hits, TV is broadcasting economic news and vocabulary
is read at the same time. But that is exactly what a mere addition of media
effects is assuming.
3 Learning Organization and Organizational Learning
Learning is the acquisition of a relatively lasting change of behavior
(or the potential for it). Learning means exploring and investigating new
things, being curious and leaving routines. Organizing, on the other hand,
implies laying-down standards and routines, and a restriction of the behavioral
spectrum (in order to improve efficiency). On this understanding, every
combination of "learning" and "organization" form a
so-called oxymoron, i.e. a contradiction in terms [Weick/Westley
1996] Since the term organizational learning had been introduced by
Argyris and Schön, several attempts have been made to reconcile the
unfortunate couple. [Argyris/Schön 1978]:
- When comprehending "organization" as a rule describing the
desired functionality of a social system, an "instrumental perspective"
is adopted which contains prescriptive specifications regarding the characteristics
of the organization ("How-to"-approach; [Tsang
1997]).
- When viewing an organization as a social learning society comprising
many individuals, an "institutional perspective" is adopted based
on descriptive approaches on how collective learning processes actually
look [Tsang 1997].
Moreover, there was a discussion whether management knowledge is a combination
of know-how and know-why [Kim 1993] or a mixture of
explicit and implicit or tacit knowledge [Nonaka 1994]
Kluge and Schilling propose to define "organizational learning"
(OL) as co-operative learning in a social system, and "learning organization"
(LO) as the formal framework which allows continuous life-long learning
[Kluge/Schilling 2000] Kluge and Schilling come up
with the following conclusions [Kluge/Schilling 2000]:
- Organizational learning as a change and adaptation of the organization
members' mental models takes place as direct, mostly informal interaction.
Information technology is of little importance as far as information take-in
and information evaluation is concerned, but is of high importance as a
means of storage and transfer.
- There are organizational processes which improve information processing
and transfer, e.g. learning orientation, trial and error-learning, team
work, and standardization.
- It is essential to hold a balance of "old" and "new"
personnel. Social relationships support the organization but at the same
time innovations are prohibited. Social relations tend to stabilize within
a few months only, but an organization can only learn by leaving familiar
paths.
In a recent study the German company unicmind.com surveyed the top 350
German companies,102 of them responded to the call for information about
e-learning and knowledge management. The results show that 90% of the companies
employ e-learning, such as computer-based trainings, but only 25% use WBT;
e-learning is implemented in order to reduce costs (70% agreement) whereas
knowledge management is implemented to exploit the knowledge resources
optimally (72%); e-learning and knowledge management projects mostly are
initiated by human resource departments (= 62%, IT dept. = 23%) but the
systems are mainly used by marketing and sales forces (= 69%, IT dept.
= 52%). But, knowledge collection, selection, and distribution mainly depends
on informal communication. Active model learning and coaching is only possible
where the management span is small (fewer than 10 persons) and the organizational
culture supports social learning. Strong personal support at the working-place
has a multitude of positive consequences: There is a growth in satisfaction
and self-efficiency as well as in the identification with the enterprise.
Contrary to some theories regarding OL, informal relationships cannot be
forced by means of organizational measures, but mostly develop as informal
relations. Job rotation, overlapping project groups and systematic succession
plans help to establish informal relationships [Blickle
2000].

Figure 5: Single Loop and Double Loop Learning Cycles [Kim
1993]
One of the most popular concepts of organizational learning is a learning
cycle consisting of observation, assessment, design, and implementation
(= OADI). Simple learning (single loop) can be supported technically, organizational
learning demands a specific human resource management (double loop). At
the beginning of this chapter, learning was defined as a relatively lasting
change in behavior, triggered by experiences. It is true that by communication
people can exchange information. Experiences, thoughts and feelings, however,
cannot be directly transferred from person to person. From a psychological
point of view, a definition of learning is only possible and sensible when
there is a learning objective or learning task to distinguish the continuous
change of mental processes from specific learning processes. Learning in
this sense is meant to be every relatively steady change in visible or
potential behavior deliberately acquired by an individual through experiences.
Contrary to most concepts of OL, learning does not only include verbally
describable expert or fact knowledge. Neither is it determined by observation
and imitation. Learning is a general, creative analysis of the environment
and the body in order to enhance one's own potentials and abilities. The
knowledge obtained therewith is not a collection of objective facts: We
cannot distinguish between the world we are experiencing and our knowledge
about the world because our knowledge is our world [Johnson-Laird
1993].
Assumed that the terms OL and LO are oxymorons, the compound "knowledge
management" is as senseless as e.g. the term "virtual reality"
for real-existing three-dimensional computer graphs. To direct and to control
"knowledge" from aspects of managerial objectives would imply
that the experiences of the world of a group of people can be directly
manipulated. A simple separation of data, information and knowledge, or
terms like "explicit" and "implicit" knowledge is too
restrictive and suggests a clarity that does not exist: knowledge cannot
be managed and learning cannot be organized. Accordingly, the empirical
results in this area are little encouraging. However, the psychological
view of learning as a way of systematically changing or enhancing one's
knowledge - and with that one's experiences and views of the world - enables
us to influence this behavior to the advantage of the organization (and
its members).
4 The Market of Knowledge Applications
One of the most successful enterprises of the world is Cisco Systems
which is producing most of the Internet's routing systems. In 1999, the
CEO of Cisco, John Chambers, stated: "Investing into technology
was the first wave. Investing in services is the second wave. E-learning
will be the third wave". Traditional means of education are no
longer adequate to meet the needs of life-long learning. Continuous education
for large numbers of people appears to be unrealistic if conventional strategies
are pursued. Even where available, the quality of education does not meet
the high standards of international business. Furthermore, in many countries
public and private funding for educational services are declining while
costs rise faster than income levels and tax revenues. Therefore, electronic
distance education will become a major source for ongoing education in
the international knowledge-based economy [Romer 1993].
In 1998, the German Economical Institute (IDW) published the results
of its study about on-going education in Germany between 1992-1995:
About 75% of all employees participated in training courses, this percentage
increased about 10% during the course of the study. At the same time, the
educational budgets were reduced by nearly 10% (resulting in 34 billion
German Mark = US-$ 20.5 billion) - at an average of 1670.00 German Mark
(US-$ 1000) per employee [Hasebrook 1998].
In a current study, the Gartner Group estimates that as early as in
2002 60% of the e-commerce enterprises will use skills management, and
that 80% of them will experience a considerable increase in productivity
as a result. For the purposes of recruiting, employing and training of
staff there will be a vast increase in the usage of the internet. According
to market analyses of the IDC, the turnover of skills management solutions
will increase tenfold from about 565 million USD in 2000 to almost 5.6
million USD in 2006.

Figure 6: Screen shot from the Skills Management Information System
'SMIS' adapted for Deutsche Bank/Private Banking (Germany) - selection
boxes help to identify job roles, prior knowledge, and time schedules (left),
a colored table indicates skills covered by recommended training courses
(right).
Most technical systems concerning the human capital of a company focus
on the administration of personnel and training, such as SAP Human Resource
modules, Peoplesoft or SABA - just to mention a view of them. An US-American
study lists about 300 systems for training administration and delivery
[Hall 2001]. But finding matches of needs and demands
certainly means more than matching keywords to indices or user profiles
to database requests. The knowledge economy is not so much
about information, it is about people. In a joint initiative of several
partners we implement a Skills Management Information System ('SMIS', see
figure 6), which enables the user to select learning modules according
to her or his indivdual demands, prior knowledge, and time schedule.
To make most of the knowledge and competence resources of ones staff
and to motivate them for life-long learning is a key success factor of
any organization. In former times, a good administration of personnel was
sufficient, but nowadays effective personnel marketing and active personnel
development are needed. Ilogos Research report that in 1998 only 29% of
the international top 500 enterprises chose e-cruitment for the purpose
of recruitment, whereas the percentage rose to 60% in 1999 and to almost
80% in 2000. There is a similar development as regards the usage of online-media
for qualification: In 1997, Internet and Intranets together amounted to
only about 2.4% of the total turnover of the education market. The IDC
(International Data Corporation), however, estimates that there will be
an average annual increase of 62% and 140% respectively in 2002. Thus,
in 2002 about 39% of the turnover of the education market will be realized
on these platforms.
5 Knowledge and Abilities
"The only capital an organization has that is irreplaceable
is the knowledge and skills of its people. How productive this capital
is depends on how efficiently people share what they know with those who
can put that knowledge to good use," noted the US-American entrepreneur
Andrew Carnegie as far back as 1930. In 1999, the HR-XML Consortium [http://www.hr-xml.org]
was founded which - in derivation of the XML 1.0 Standard - is elaborating
a meta-data standard for human-resource-related e-commerce.
The group defines itself as follows: The HR-XML Consortium is an independent,
non-profit association dedicated to the development and promotion of a
standard suite of XML specifications to enable e-commerce and the automation
of human resources-related data exchanges. The mission of the HR-XML Consortium
is to spare employers and vendors the risk and expense of having to negotiate
and agree upon data exchange mechanisms on an ad-hoc basis. By developing
and publishing open data exchange standards based on Extensible Markup
Language (XML), the Consortium can provide the means for any company to
transact with other companies without having to establish, engineer, and
implement many separate interchange mechanisms.
Members of this consortium are big ICT companies like IBM, Cisco and
Oracle, as well as software companies like SAP and Peoplesoft, and staff
agencies like Randstad and Manpower, or financial services like Charles
Schwab & Co. At the moment, about 100 companies belong to the consortium.
The introduction of this standard and the early adaptation of the solutions
in store put both vendors and users of software solutions and services
in the areas of e-cruitment and e-learning in an exclusive position among
the competitors and enable them to organize global markets.
Internationally acknowledged and XML-based standards for the description
of knowledge products are being developed for e-learning. The most important
standard
is Learning Object Metadata (LOM). Here is the self-description of the
LOM Consortium [http://www.manta.ieee.org/p1484]:
The mission of the consortium is to develop technical Standards, Recommended
Practices, and Guides for software components, tools, technologies and
design methods that facilitate the development, deployment, maintenance
and interoperation of computer implementations of education and training
components and systems. Many of the standards developed by LTSC will be
advanced as international standards by ISO/IEC JTC1/SC36 - Information
Technology for Learning, Education, and Training.
There are several providers for software and consulting in the field
of e-learning and especially in the development and management of skills.
Beside the modules for the administration of human resources (HR) by SAP
and PeopleSoft, there are specialized providers, e.g. Meta4 from Spain
or Infinium, and SkillsScape from the USA. Since the majority of enterprises
confine themselves in their staff development to the handling of biographical
and administrative data, most of the offered software solutions support
the administration of human resources only. However, since the rise of
the information society and its evolution into a knowledge society there
is a need for a strategic reorientation from the administration to a more
active development of skills in human resource management (HRM). In this
context, skills-oriented management paradigms have lately come into existence
which are now considered in corresponding management information systems
(MIS). The vast majority of providers of software and service solutions
in the field of HRM are still concentrating on administrative solutions,
which are of little help in the proactive planning and usage of skills
in enterprises.
The skills management system used by efiport (cf. figure 7) is supplied
with a thesaurus of some 1000 skill designations covering general skills
(with a strong focus on banking and finance), personal skills (e.g. languages)
and social skills (e.g. communication abilities). These skills can be put
together to create profiles for job and function descriptions, project
tasks and job advertisements. The profiles in turn can be combined to form
model career paths and then linked to offers of training. Employees thus
have the opportunity to assess their own existing skills and their target
profile in the context of an internal online job mart. Comparing themselves
with existing profiles will help them to assess how further training and
project involvement might best contribute to developing their career. To
this end the system not only makes all profiles and the links between them
available: it also provides a gap analysis (target-actual comparison) relative
to all these profiles, together with proposals as to suitable training
measures that would move a person's profile toward their desired target.
All data are stored as XML data sets and are based on international standards,
such as LOM and HR SEP.

Figure 7: Combined Meta Data Management for Learning Object
Metadata (LOM, right hand) and Human Resource Standard Exchange Protocoll
(HR SEP, left hand) based on XML binding (skills and learning management
system of efiport).
6 Psychological Factors of Success
Bill Gates, founder, former CEO, and present head of research of Microsoft
Inc., once claimed that modern technologies of information and communication
form the "nervous system" of a modern enterprise. At least in
the near future, this will presumably be an apt remark. Certainly, personal
communication is not replaced by them, but forms - next to this "nervous
system" - the genuine circulation, the basic foundation of life. From
1997 until 1998, the University of Karlsruhe under the direction of Prof.
Gemünden surveyed 47 enterprises and 58 persons regarding factors
of success and failure which they knew from their daily experience. They
distinguished factors within project teams and factors within the organization.
The essential results are summarized in figure 8:

Figure 8: Central Interfering Factors in Projects of Enterprises
as Experienced by Project Teams and the Entire Organization. [Gemünden/Bobin
1999]
Gemünden and Babin drew the following conclusion from their study
[Gemünden/Babin 1999]:
- Conflicts are inevitable and are no substantial threat for the success
of a project.
- Conflicts should be approached and discussed in an open manner, and
not be covered up, a solution should not be enforced, and conflicts should
under no circumstances be avoided.
- Teams with good group dynamics experience less conflicts and tend to
develop a practicable approach to managing conflicts.
- American citizens are accustomed to an open, direct way of managing
conflicts.
- In Germany, the existence of conflicts is commonly acknowledged and
has considerably less effects on the success and satisfaction of team members.
The theories X and Y, formulated by McGregor as early as 1960, and supplemented
by Schein by a "social theory" [Schein 1988]
are well known. Summarized briefly, the ideas state the following:
- Theory X: employees are basically not motivated to do their work and
must therefore be encouraged to do their work effectively by external rewards
and control.
- Theory Y: employees are seeking development and confirmation of their
selves at their working-place and therefore will be striving to do their
work as successful as possible.
- Social Theory: at their working-place, employees are looking for social
contacts and want to be respected and appreciated by their colleagues;
therefore they will try to do their work in a way, that will bring them
as much confirmation as possible in their environment.
In surveys, approximately 10% of the interviewees tend to support theory
Y, 40 % support theory X and the remaining 40% back the social theory.
This weak emphasis on the aspects of self-development and responsibility
has consequences: Most enterprises have not succeed in winning their employees
for their goals. Only 10% have gained agreement with the enterprise's goals
by processes of social learning, 5% had chosen the enterprise because of
its goals and more then 50% of the employees disagree totally or in part
with the enterprise's goals [Berkel/Herzog 1997].
Commitment to performance is not only based on "the hope for success".
There is also "the hope for failure", when the goal of a task
is disapproved of. There is "the fear of failure", if one does
not feel fit for the task, and there is "the fear of success",
if the employee fears, that the activities will result in disagreeable
consequences or demands. Landy combined these basic ideas in the goal-setting
theory [Landy 1985]. It lays stress on four factors
of success:
- The determination to reach a joint goal depends especially on whether
it agrees with the individual goals. The employee will try to obstruct
or prevent a goal that he or she disapproves of personally.
- Employees have to know in advance, which consequences they will have
to face, if milestones are reached or not reached. Undefined consequences
lead to a more observing attitude. It is highly important, that it is transparent,
at what time which consequences will follow and how they are defined.
- Employees work most efficiently, if there are precise milestones and
they can adapt their behavior accordingly. Orders like "Do your very
best !" are not helpful or even annoying.
- Difficult goals encourage efforts and competition to prove one's expertise.
If goals are too simple, they undermine the intrinsic motivation.
The simple technical means of communication most frequently produce
the most important effects: For instance, Sproull and Kiesler showed in
several studies, that simple e-mail conferences had several advantages
over personal discussions [Sproull/Kiesler 1991].
The communication was more balanced and focussed, and more often led to
unanimous results. However, co-ordination via e-mail took more time than
direct communication. Weisband and Atwater observed that the self-appreciation
of participants in electronic communication is more uncertain and more
restricted than that in direct communication, because social feedback and
sympathy values are lacking [Weisband/Atwater 1999].
The success of electronic communication is highly influenced by the strategic
employment of seniors and specialists. Ogata and Yano, e.g., found out
that electronic discussions among colleagues tend to be scarcely attended
and to "die" quickly. If experts and seniors participate, both
activity and drop-off rates are considerably higher [Ogata/Yano,
1998] Electronic communication is increasingly used to support learning
processes. Bolling and Robinson examined co-operative learning by comparing
three learning groups: individual learning with print products, group learning
with print products, and group learning with multimedia [Bolling/Robinson
1999]. Considered all together, co-operative learning turned out to
be the best method; multimedia was best for students with a high amount
of previous knowledge.
Information and communication technologies have led to the fact, that
local and temporal distances are of less importance. It is more important
than ever to practice the principles of management, that are usually restricted
to ceremonial proclamations. A management structure, that is based on an
open exchange of information also known as "leader member exchange"
(LMX), leads to results, that are significantly better than those of a
management, which is predominantly focused on organizational and cultural
changes. This is holds true for on-site teams relying on face-to-face communication
and on-line teams which only communicate by computers [Howell/Hall-Meranda
1999]. If the management participates actively in group processes and
defines ambitious (but not unattainable) goals, this enhances both the
motivation and the team spirit of the group [Tesluk/Mathieu
1999]. Informal communication, based on personal confidence, is the
force that enlarges the knowledge of an organization, as studies regarding
LO and OL have shown. In the first instance, technology only solves "technical"
problems of data storage and distribution. In an economy working interdependently
and relying on direct knowledge transfer these logistical tasks are not
to be underestimated. The application of these technologies must not be
used as an excuse for not consequently realizing the principles of a democratic
management and a transparent culture of communication.
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